NAR Forecasts 'Modest' CRE Rebound

The commercial real estate sector is likely to see a modest rebound over the next two years, according to the National Association of Realtors.The Washington-based trade association is basing its outlook on a pickup in leasing activity. “With low inventories and very low borrowing costs, we expect business capital spending to rise and create more jobs over the next two years, so we are cautiously optimistic for a rebound in the commercial sector,” said David Lereah, the NAR’s chief economist. The NAR expects 25 metro office markets -- including Washington, D.C., New York City, and Los Angeles -- to outperform other markets over the next two years, with above-average occupancies. In the warehouse sector, 26 markets -- including Los Angeles, St. Louis, and East Bay, Calif. -- are expected to outperform other markets. Twenty-one retail markets -- including San Diego, New York, and Boston -- are expected to lead the rest. In the multifamily sector, the trade association expects 22 markets to have “the most favorable demand/supply fundamentals over the next two years.” They include Minneapolis, Chicago, Boston, and northern New Jersey.